After a frightened carpenter gives away a mysterious, crying log to his neighbor Geppetto, the old man carves it into a mischievous puppet named Pinocchio who immediately runs away. The resulting chase leads to Geppetto's unjust arrest by a policeman, leaving the newly animated puppet to return to an empty home where a strange presence awaits him.

After suffering a series of harsh mishaps at home, Pinocchio is lovingly repaired by his father, Geppetto, who sells his own winter coat to buy the puppet a schoolbook. However, as Pinocchio sets off for his first day of school, a distant distraction threatens to lead him astray.

Desperate to see a puppet show, Pinocchio trades his brand-new spelling book for a ticket, only to disrupt the performance when the marionettes recognize him as one of their own. After courageously offering himself to save his fellow puppets from the theatre's menacing owner, Pinocchio is spared and sent home with five gold coins, only to be intercepted by a suspicious fox and cat.

While traveling down a country road with his gold coins, Pinocchio is befriended by a cunning Fox and Cat who tempt him with tales of a magical field that can multiply his wealth. After the devious duo abandons him with a hefty inn bill, the naive puppet ignores a warning from the Cricket's ghost to return home to his father. Instead, Pinocchio ventures deeper into a dark forest, only to find his path blocked by two mysterious hooded figures.

After unmasking his treacherous companions, Pinocchio flees into the dark forest and desperately seeks help at a mysterious cottage, only to be rejected by a sorrowful, pale child. Ultimately captured by his pursuers, he is left suspended upside down from a great oak tree as he stubbornly refuses to surrender his remaining gold coins.

After being rescued and healed by a turquoise-haired Fairy, Pinocchio learns a harsh lesson about honesty when his nose grows longer with every lie he tells about his missing gold coins. Once he is forgiven and his nose is restored, he happily sets off to reunite with Geppetto, only to cross paths once again with the Fox and the Cat.

Tricked by the Fox and the Cat, Pinocchio buries his remaining gold coins in hopes of growing a tree of fortune, only to be robbed and unjustly imprisoned. After serving his four-month sentence for his own foolishness, he is finally released and sets off to reunite with the Fairy.

Upon discovering a tragic gravestone where the Fairy's cottage once stood, a heartbroken Pinocchio learns from a giant pigeon that Geppetto has gone to sea to find him. After being flown to the coast, Pinocchio witnesses a monstrous sea creature swallow his father's boat whole and heroically leaps off the cliff into the ocean to save him.